FAQs
- What Is CPA (Certified Public Accountant)?
CPA, which stands for Certified Public Accountant, is an accounting qualification granted by the US government (State Board of Accountancy) to individuals who fulfill certain education and experience requirement as a public accountant. The CPA title is one of the most globally recognized professional qualifications, and arguably the most prestigious in the accounting field.
Only CPAs are allowed to own (either as sole owner or as partners) a public accounting firm, and only CPAs can sign the audit report on behalf of the firm.
While there is no requirement for CPAs in private business, many big corporations strongly prefer their senior financial professionals to have a CPA qualification to show their knowledge and expertise in the accounting field.
- CPA Certificate vs License: What is the difference, do I need both?
CPA Certificate vs License:
An Overview Each state has its own laws and rules governing the CPA profession, and each has its own Board of Accountancy that monitors the CPAs that it licenses.
For most states, the term "CPA certificate" and "CPA license" is inter-changeable. However, for "two-tier states" there is a distinction between the two:
*CPA Certificate
Work experience is often not required.
No CPA CPE (continuous professional education) hours required.
Scope of work is limited as certificate holder cannot own a CPA firm (either as sole owner or partner) or sign an audit report.
Cannot normally hold yourself out as a CPA within the jurisdiction, i.e. cannot call yourself a CPA in the state where you get the CPA certificate.
*CPA License
Typically require 1-2 years of working experience, supervised and/or verified by a CPA licensee.
CPE hours required every reporting years (typically 120 hours every 3 years).
Can use CPA title in business cards and own CPA firm/sign audit report.
Because certificate is easier to get, most candidates consider certificate as the "first level". The license, or permit to practice, is the "second level".
However, many international students aim for certificates only in their CPA application because the CPA qualification is used mainly for the enhancement of their credentials.
In this case, it's a good idea to check with your state regarding the specific requirement for a CPA certificate vs license, and more importantly, any restriction on the use of CPA certificate.
Should you go for ACCA vs CPA? Does it make sense to get both? Let's take a look.
- ACCA vs CPA: Organization Structure
*US CPA
The CPA license is granted by each of the 55 states or jurisdiction in the United States. There is no centralized body and each state has slightly different CPA exam and licensing requirements. International candidates are often confused and frustrated by the complicated application process.
*ACCA
ACCA is based in the United Kingdom. It operates as a single entity with much simpler application process.
Although it is a statutory accounting body in the UK, international candidates generally consider the certification as a global brand.
- ACCA vs CPA: Application & Qualification
This is probably the biggest difference when it comes to CPA vs ACCA.
*US CPA
Candidates must have a minimum of a 4-year bachelor degree and preferably a master's degree in order to fulfill the 150 credit hours, equivalent to 5 years in higher education.
Once you are approved for the exam, you will sit for the exam but you are on your own in terms of how to get prepared. Most candidates choose to take review courses to help in the studies.
*ACCA
The entry level is much lower – you are qualified as long as you have 3 GCSEs and 2 A Levels in 5 separate subjects including Math and English. In other words, most high school graduates can qualify. If you have a bachelor degree in relevant subjects, you can apply for exemption on part or all of the papers at the Fundamental Level.
Unlike the US CPA, once candidates are registered, ACCA takes an active role in preparing you for the exam by providing study guides, paper exam papers. They also run a database of ACCA Approved Learning Partners.
- WACCA vs CPA: Exam Content And Format
*US CPA
There are 4 parts of the exam: Financial Accounting & Reporting, Audit & Attestation, Regulation and Business Environment & Concepts.
The exam is 100% computerized consisting of multiple choice questions, task-based simulations (i.e. intense case studies) and written communications. Grading is mostly computerized.
You can choose to take the 4 parts one at a time, 2 at a time or even 4 at the same time. You can sit for the exam any time (Monday to Saturday) during the first 2 months of each quarter and at any prometric centers throughout the US as well as in Japan, Brazil and 4 Middle Eastern countries.
*ACCA
There are 14 papers divided into Fundamental Level (9 papers) and Professional Level (5 papers). Candidates can apply to waive part or all of papers at the Fundamental Level.
Some but not all papers are computerized. The exam is offered in June and December each year in more than 170 countries throughout the world.
- ACCA vs CPA: Time Required to Pass
*US CPA
Most candidates aim to pass the CPA exam within a year. Some who have the time and commitment can study all materials within 6 months, take all 4 parts of the exam in one go and pass.
*ACCA
Given the number of papers and the fact the exams are held only twice a year, candidates generally need 3 to 4 years to complete all papers and become an ACCA member.
- Reciprocity and Exemptions
*US CPA
AICPA (the US accounting body) has reciprocal agreement with 7 accounting bodies in the world. Their members can choose to take a simplified version of the exam known as IQEX. ACCA is not among these 7 accounting bodies.
*ACCA
ACCA is much more "generous" in this regard — exemptions are granted to AICPA members for 8 papers (see below) as well as Foundations of Accountancy.
- Other Considerations
For the US CPA exam, unless you reside in the few countries where international exam sites are available (up to May 2012, these countries are Japan, Brazil, Bahrain, Kuwait, Lebanon, the UAE), you will have to travel to the US for the test.
On the other hand, the ACCA exam can be taken in more than 100 countries.
For candidates who come from a country that is exceedingly difficult to get a US VISA, ACCA could be a much preferred choice.
- Conclusion
The US CPA is arguably the most prestigious accounting qualification. Entry barrier is high with an equivalent of a masters' degree together with strict working experience requirements.
There are certain works that can only be done by CPA e.g. signing an audit report and opening a CPA firm. It has a distinct advantage to obtain this qualification especially if you are interested in public accounting in the United States or in American firms.
For ACCA, the application process is much simpler and entry barrier is low. However, it takes years to complete the studies and obtain the membership. While ACCA is globally recognized it is not the statutory accounting body, and not as highly regarded outside the UK and commonwealth countries.